India’s Digital Financial Services Opportunity in a Post-COVID World

Source: Observer Research Foundation

COVID-19 could be the “demonetization moment” for digital services delivery in India. In 2016, the adoption of digital payments was accelerated by a lack of cash during the unanticipated demonetization policy with a pre-established national tech infrastructure. Now, during an equally-unexpected macroeconomic shock of a different variety, entrepreneurs across India’s formidable start-up ecosystem have been pivoting business models in unexpected ways leveraging technology to solve meaningful challenges for their consumer and small business customers arising from the significant health and resultant economic crisis in India.

Since 2017, the financial services industry in India has seen accelerated growth and widespread adoption of new mechanisms for digitization. Complemented by proactive regulatory and policy efforts for financial inclusion and an increasing availability of affordable internet and smartphones, fintech has now become a critical component in urban, semi-urban, and last mile distribution of economic development through financial services.